Credit Disintermediation and Monetary Policy

Nicolas Crouzet*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


Since the early 1990s, the share of loans in total debt of US firms appears to have declined. This paper explores the implications of this trend toward “disintermediation” for the transmission of monetary policy shocks. Empirically, investment among firms with high loan shares is significantly more responsive to monetary policy shocks. Moreover, this pass-through has declined since the early 1990s, when disintermediation started. A model where firms choose debt structure by trading off the flexibility of loans against the lower cost of bonds can account for the higher sensitivity of more bank-dependent firms to monetary shocks. In this model, disintermediation also leads to a decline in the overall pass-through of monetary shocks to investment.

Original languageEnglish (US)
Pages (from-to)23-89
Number of pages67
JournalIMF Economic Review
Issue number1
StatePublished - Mar 2021

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics, Econometrics and Finance(all)


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